Terri Goveia
Combined Intact-AXA changes landscape in Quebec | Canadian Insurance

Combined Intact-AXA changes landscape in Quebec

Intact will have 24.9% market share in the province, says DBRS.

Quebec brokers will see the biggest shift in the market landscape once the Intact-AXA deal moves forward, says the head of the province’s broker association.

The two insurers–leaders in the province–are also the main markets there, and the deal will leave a much bigger hole in broker books in Quebec than it will in other provinces with more insurers to choose from, says Stephan Bernatchez, chairman of Regroupement des cabinets de courtage d’assurance du Quebec (RCCAQ).

Once Intact absorbs AXA Canada, it is expected to have a 16.5% to 17% market share across Canada, but in Quebec, that share will be more in the 25% range [of the damage market], says Bernatchez.

“Within the broker channel it’s [even] higher,” he told Canadian Insurance Top Broker, estimating that a larger Intact would have roughly 40% of the market.

“We don’t have as much market as they have in other provinces, so it will be a challenge for brokers.”

In 2010, AXA Canada represented 43% of direct written premium in Quebec, according to credit rating agency DBRS, which confirms Berntachez’s estimates for the deal’s impact in the Quebec market overall. Post-approval, the newly combined company is expected to have a 24.9% market share in Quebec, compared to a 13.2% share in Ontario and 13.7% in the rest of the country, according to a ratings bulletin issued this week.

But the challenges may provide some opportunity, Bernatchez adds, noting that other insurers, like Aviva–which follows Intact and AXA as leaders in the province–could fill the gap. “It’s up to them to make the best of that deal.”

“Brokers should wait to see the outcome of the deal,” he advises.